Question

On December 31, 2016, the ledger of Hernandez Company contained the following account balances: Cash $11,800 31,300 Maria Hernandez, Drawing 2,050 Fees Income 1,250 Depreciation Expense 45,250 O O ONO O O 1,900 15,300 V Salaries Expense Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Maria Hernandez, Capital 1,650 Supplies Expense 2,150 Telephone Expense 46,550. Utilities Expense 1.750 2000 70,550 - Prepare the closing entries for the above transactions. D View transaction list

Answer 1

1.  Closing entry for revenue

Date	General journal	Debit	Credit
Dec 31, 2016	Fees income	$45250
	Income summary		$45250
	(To close revenue account to income summary)

2. Closing entry for expenses

Date	General journal	Debit	Credit
Dec 31, 2016	Income summary	$24900
	Depreciation expense		$1900
	Salaries expense		$15300
	Supplies expense		$2150
	Telephone expense		$1750
	Utilities expense		$3800
	(To close expenses accounts to income summary)

3. Closing entry for Income summary balance

Date	General journal	Debit	Credit
Dec 31, 2016	Income summary	$20350
	Maria hernandez capital		$20350
	(To close Income summary balance )

Note : Calculations for balance in income summary-

Balance in income summary = Credit balance - Debit balance

$45250 - $24900 = $20350

4. Closing entry for drawing account

Date	General journal	Debit	Credit
Dec 31, 2016	Maria hernandez capital	$11800
	Maria hernandez drawings		$11800
	(To close drawing account to capital )